Mill a t S tu rgeon

Falls, Ontario, closed

down in 1930, reha-

bilitated in 1947 and

now manufacturing

corrugating board.

S E C T I O N 1

FOR THE YEAR E N D I N G DECEMBER 31 - -

~ouglas W. Ambridge Edward W. Bickle

Hqrry J. Carmichael George R. Cattreh

Allan Graydon, K.C. James Henry Gundy

T. Radgie McLagon Robert H. Reid

Joseph P.Ripley William H. Smith

J. S. D. TO&, K.C.

~ouglas W. Ambridge James Henry Gundy

William H. Smith J. 5. D. Tory, K.C

~ o u ~ l a s W. Ambrid e, President and 8cneral Manager

William H. Smith, Vice-president

Thomas boadhurst, Secretary

Howard Young, Treasurer

Montreal Trust Company Toronto,'Ont.

Montreal Trust Company Montreal, Que.

City Bonk Farmers Trust Company New Yark. N. Y.

Thm Toronto General Trusts Corporation Toronto. Ont.

The Eastern Trust Company Montreal, Quo.

The National City Bank of New York New York, N. Y.

Price, Waterhouse 8 Co. Toronto, Ont.

;IRKED PROGRESS in the task of rebuilding the Company was made i/// during 19.17. The mills \yere operated a t rates in excess of their normal

capc:ities, and as a result new records in total sales and in earnings were

set up. l'he prices of our products h a w been gradually adjusted so that their

relationsl~ip to the prices of other world commodities is beginning to be more

r :~t ionI . 'I'l~is adjusttnent has been the result of the interplay of economic forces

in the free markets of the 17nited States.

a result of the i~nproved position of our products in the world's markets

and of the strong dwn:~nd for them which resulted in capacity operations, it has

bee^^ possible to proceed wit11 the reconstruction programme which will be more

fully discussed below.

RETIREMENT INCOME PUN, GROUP INSURANCE, EIC u

MATERIALS AND SERVICES

BOND IWeEREST O u DIVIDENDS ON

PRERRRED SHARES am@@ ....w...c RETAINED IN THE BUSINESS

/'

f i Kfj/M;r///c.' Profits for the year ending December 31, 1947 after all charges i.

were $8,563,046.

Your Directors felt that the placing of both clahes of preferred stock on a

regular dividend basis was a step which should he taken as soon as possible, and

during the year this was done and all arrears on the prior preferred were paid up.

Your Directors are convinced that further rehabilitation of the Company's properties

is necessary before a dividend policy on the common shares can be established.

The above chart shows the distrilmtion of the revenue received during the

year. This chart clearly indicates the effect of retaining a very large proportion

of the profits in the business.

!y)/ + 1 ,lg, f l / / / F ' .~ 11 ' ./W The balance sheet reflects the redemption on April 1st.

1947 of $53,093,700 of 5% honds due 1965 and the issue as of that date of $45,000,000 . of 3 x 7 4 serial and twenty-year bonds.

As a result of this redemption it was possible to redeem the 14 shares of 5y0

preferred stock which were issued as part of the Plan of Reorganization.

The large increase in the wlne of the inventories required to maintain the

present scale of operations is also noteworthy. The value of the Company's properties,

. . c:~pit:tl \vl~iclt has I~ecn avnil:~l)le in recent yews. l l te reduction in working

c;~pit;tl ~vl~iclt took p1:tc.e during 19-17 due largely to the redemption of the 5r / , bonds

~nentiottctl ;tl)ovc 11~s not 11;11nperetl the Cotnpnny's nperatiot~s, altltouyl~ it has been

necess:try to 1)orrow ntoney from tlw I)it~tk to assist in financing the very large \\-ootls

opcr;ttions wl~ich arc seasonal in nature and wltich have been necessary to maintain

the prcw'ltt rccortl production.

Your Directors are convi'nced that the successful future of the Company

is dependent upon its ability to adjust and modify its mills so as to make the fullest

possible use of the forests which have been committed to its * keeping. With this in

mind a new central research laboratory adequately eqfipped and staffed has begun

operations a t Sault Ste. Marie. It is confidently expected that the results of the work

being carried out there will do much to increase the productiveness of the forests and

to make possible a healthy diversification of the Company's products.

Taxes on income payable to the Dominion and Provincial Governments for

year 1947 are estimated a t $9,800,000. This very large sum is equal to 44.6y0 of

t&otal payrolls. It is enough to pay an army of over 4,500 men a wage of more

$40 per week for a whole year.

It is to be hoped that the tax load on the Company may be progressively

reduced so that it may in future be possible to provide for adequate returns on the

capital invested and to increase the opportunities for productive employment in

Canada and so as to permit the Company to play its full part in the development

of the forest wealth of the nation.

Much progress has been made during the year on the rehabilitation progra.mme.

In addition, long-deferred maintenance and modernization work was put in hand

and completed; some new capital equipment was installed and is now in operation,

and a great deal of new equipment was ordered and will be delivered to the various

mills for installation in 1948. The present position is therefore that the existing

equipment in the mills is in measurably better condition, some entirely new capital

additions are in operation, and many new capital improvements are well under way.

Illustration shows newly installed Rotary Digesters ot Sturgeon Falls,

Ontar io

At Sturgeon Falls the new semi-chemical corrugating board plant began

operating in September. It is turning out a high quality product and by the time

this report is distributed will be in full production.

At Smooth Rock Falls the new caustic extraction plant went into operation

in August and has greatly improved the quality of the bleached sulphite

produced there.

'I'he new grinder room a t the 'I'l~~cnder Bay n d l went into operation during

J ;~nuary 1948 and 110th production and costs have heen improved as expected.

The board machine a t Iroquois F;llls has been speeded up and modernized

and is now producing 405; more board of a very much improved quality for use in

Canada and for export to the United States.

The plsns for speeding up and modernizing the mills a t Pine Falls, Iroquois

Falls, Port Arthur, and Beaupri. have been completed; the necessary equipment has

heen ordered and (lie \\-orli will proceed as deliveries are made.

The principal mills of the Company and its subsidiaries with presently

existing capacities and type of products are shown in the chart below:

The above chart shows horn the amounts set aside for depreciation during

past gears compare with the capital expenditures made in the same period. The

recent sharp increases in capital espenditures can be seen in their relation to the

past when the difficulties of the receivership prevented the expenditure of even the

annual depreciation on the work of keeping the Company's properties in first

class condition.

Sewsprint production for the year 1917 again estaldished a

new nll-time record. A11 the Company's mills increased

their annual productio~~s and in ;~dtlition, further productive

facilities were pnt to \vor!i. The Sturgeon Falls mill began

the proiluction of corrngating 1)o:trd in September and

produced n total of 61% tons during the rcni:~inder of the ye:rr. .It Beauprb the

manufacture of unhleaclled sulpllite for sale was 1)cgun in July by using some excess

capacity wliicli existed there. 'I'l~e ;tl)ove l;~l)le sl~o\vs the nnnual tonnages of various

prodrwts which the C01np:tny II:IS protlucct! i l l recent J-e:~rs.

~vork of srlting I I ~ llrc staff and ~Hices of t l ~ e new sales company was completed. r . I h c new slorcy 0 1 1 tlw ' l 'oro~to office buil t l i~~g \v:ls fi~~islletl and t l ~ e control and

n ~ a l r : ~ g r ~ n e ~ ~ t of the C o ~ n p a ~ ~ y ' s sales policies is I I O W in Toronto.

Every effort is Ixing ~natle to l)uiltl a strong sales force so as to improve the

services to our n ~ n y customers ill (';III;I~:I, i l l l l ~ e 1:nitcd States and abroad.

17~l io~ls involved ill the Compn\ . ' s ol)erntio~~s c o n t i ~ ~ r ~ e . T l ~ e estaGlisIrment of the

lletire~nent 111conle Plan reported 1;tst y w r has done 1nw11 to ensure the mail~tenance

of ;I I ~ e ; ~ l l l ~ y alnlospl~erc :1111011g tllc t l ~ ~ t ~ s a n d s of men ant1 women wlro earn their

l i v i ~ ~ g in ilic ndls, woods and offices. During the nest few years several hundred I

ant1 women n.110 have s p e ~ ~ t tlw greater part of their lives in the service of the -?

will retire under l l ~ e provisions of the plan.

Great efforts in inany directions are constantly being made to in1

well Iring. productive~less ant1 efficienry of the employees, and the Directors take

this opl)ortunity of esprcssing their appreciation of the cooperation, loyalty and

gootl\vill \vl~iclr 11ave bee11 freely given 1))- every man and \ ~ O I I ~ : I I I in the Co111pany's

cmploy during the psi ymr.

On behalf of the Board,

Toronto, March 1, 1948

WER & PAPER COMPANY, LIMITED and subsidiary companies

Other than Provincial Paper, Limited, The G. H. M e a d Company and Abitibi Service Inc.

vflfldd&&d&~/a @& 31, 19.7

C U R R E N T A S S E T S : ('nsh on hnnd i~nd in l)nnk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . Q 082.81~ >lisc.ellnnro~~s i~~ves tn~r r~ t s . Irss rrservrs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1S.1.789 A ~ ~ m n t s rcceivnl~lr. Ir.us reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,98:1,59& Invr~~tor i rs of ptllwr, pulp. wo~xl. mntrrinls nnd s~~pplies on the t~nsis of c08t. 11s ~ I e t e r n ~ i n ~ ~ I

. . . . . . . . itnd crrtilird I I ~ r~sponsil~le ofi~.inlq nn(1 ~x~wndiI t~res 01) Ioggin~ oper~tions. $48,957,937 Ixsu -1lrservcs :~pplied in reducti~m thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 915.GH7 47.:341.550

- .... $ 35,l92,679

S H A R E S O F S U B S I D I A R Y C O M P A N I E S N O T C O N S O L I D A T E D :

. . . . . . . . I'rovin~hl I'nprr. I.iniitrd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 5.500.000 , . I Ilr (;. 11. Jlri~rl ( ' ~ ~ ~ n p n n y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,02:$ A11itil)i S1~vic.e I I I ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500

-- -- 5,710,5!23

Sdr: The mmpnny'a r n l u i ~ v in auhidinry rnmpnnirs not nmnlidntnl as nl~oxu I,y tlne twlnnn n h d s of snrh s t~ l~~ i~ l i~ r i~s n* AI 1 )mn~I~r Jl, 1017 rxccds the value sl,oxn hcrrin hy $1 .unwsu.

C A P I T A L A S S E T S : I'rqwrtirs. pl:u~t itnel C ~ I I ~ ~ I I I C I I ~ nt gross p h y s i ~ d vnlues ns 111 .tpril :HI. 194li. 11s reported by Neasrs.

. . . . . . . ( 'ovrr~li~lr K. ('oll~itts. ( ' o ~ ~ s u l t i n ~ K~~ginrers. Sew York, plus sul~scqurnt ~ddilirms 111 cost $1 17,228,:304 1.r.v~--:\wruecl clvprcvi~~li~m iwnt .\pril :lO. I94(i, as reported 11y Nessrs. ('overdnle K. Colpitts, plus

sul~s~~qurnl provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,457,039 ~ - -

$ 69,771,364

r r ~ l i l t r n r s I I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 418.975 , . 1 ir1111er r ~ ~ n w s s i o ~ ~ s , itgreentents :tnd liwnses, nnd wterpo\ver rights. . . . . . . . . . . . . . . . . 18,377,259

... - - - -

Lrsa ---1lcsrrvrs for ~lepletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

O T H E R A S S E T S A N D D E F E R R E D C H A R G E S : I)e~nlsits nit11 I'r~wiwi:~l ( ; ~ v r r ~ ~ n ~ c . n t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q 149.150 1lefunrlal)le pwti~m of exwss profits I U S C ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5!0!1,513 I'repnicl insurnn~.r. tnxes. etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5G9.144 Uond discotlrrt : d eupense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938.854

1,800,096

$148,981,631 -. -. - -

C U R R E N T L I A B I L I T I E S : Iiunli Ionn (secured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . \Vngea and snlnries pnynble and accrued . . . . . . . . . . . . . Accounts puynl~le und sundry ncc.ru~~ls.

. . . . . . . . . . . . . . . I)ividen~ls pnyn1)le Jnnunry 1, 1948 Interest t ~ c ~ m ~ e d 011 First Mortgnge I%on~ls . . . . . . . . . . .

. . . . . . . . . . . 1)ominion nnd I'rovincinl tnxes on income. Other tuxes pnynl~le nnd ncc*ruc~l . . . . . . . . . . . . . . . . . . First Morlgngc I3onds-pnyn~cnts due tvithin one yenr.

A D V A N C E P A Y M E N T S O N C O N T R A C T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( N O N - C U R R E N T )

F I R S T M O R T G A G E B O N D S : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorized.. $65.000.000

- - Issued sn11 outstnndin~: 3; $ O / o First Mortgngc Serinl nonds. Series ".\" ($1,000,000 ninturing nnnunlly April 1,

l91R to 1957). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 lO.ooo.000 3! ?0/0 First S11)rtgape Twenty-Yenr f%unds, Series "A" maturing April 1. 1907

Issued.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %?5.000.000 . . . Lesu-Purcl~nseil for redrmption

Lesu-Serinl nnd sinking fund pnyments due within one year-shoan obuve. . . . . . . . .

R E S E R V E A G A I N S T P O S S I B L E D E C L I N E I N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I N V E N T O R Y V A L U E S 1,500,ooo

C A P I T A L S T O C K : huthoriecd nnd ontstnnding-

Prior I'referrecl Shnres- Annunl rumnlntive cliviclend of $2.50 n shnre; mlecn~nble nt $37.50 n shnre

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.000 shnres of $90 each.. 8 1.000.000 Preferred Shnres-

Annunl cnmulntive clividencl of $1.50 n shnre; re~lecmnlrle nt $25 n shnre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.:395.274 sl~nres of $40 enrh 27.905.440

Comnion Shares- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l,Y41,694 sl~nres willtout nominnl or pnr value W.941.295

54,816,755 E A R N E D S U R P L U S , S I N C E M A Y 1 , 1 9 4 6 :

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I'er stntement nttnched.. 10.241.613

xo tc : Annual provirionsfor e.rcrw profhstaxrr hnvr brcnde~errnincdnftrr tnkin~intoaccount invmtory rcservcs :t~~rcpnlinp $.3.350.000, in nccordunce wi~h section 6 of The Exccss Profits Tax .\a.

APPROVED ON BElI.\I,F OF THE BOARD:

D. I\'. AhlBRIDGE, Dircclor

\V. 11. ShIITH. Director

ABlTlBl POWER & PAPER

For the Year Ended December 31, 1947

P A R T I C U L A R S A M O U N T

K d Sales-after deducting outward freight, ctc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,340,010

Le.~s-Operating costs including administration, selling ancl general expenses but before provision for depreciation, depletion, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 39,719,951

A d d - -- $44,620,059 Dividend from subsidiary company, not consolidated . . . . . . . . . . . . . . . . . . . . . . P62,500

. . Profit on sale of s c c u r ~ t ~ c s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1,395 Adjustment of payment in 1946 toward employws' rctirrment income plan, less income and excess profits taxes attributable therr to. . . . . . . . . . . . . . . . . . . . 98,192

Dcd11c1- . . . . Provls~on for deprcc~at~on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,443,769

. . . P r o v ~ s ~ o n lor depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260,000

Ernployec,~' rctircmcnt income plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810,445 Exchange premium and othrr expcnscs on redemption of First Mortpagr 5';:

Ih)n(ls clue 1 9 6 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,774

Amortization of l m d cliscou~lt and rxpcr!sc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,157 Interest on First Mortgagc 5% lk~rrrls (luc 1965 (rc(lcc.mr(l in 1947). . . . . . . . . 659,080

Interest on 3?43 First Blurtgage Serial and Twenty-Ycar ilond-Scrics "A". 1,176,875 -- 6,729,100

-

PROFITS before provision for taxes on income. . . . . . . . . . . . . . . . . . . . $18,363,046

Dedud-Provisiun for:

Dominion income and excess profits taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,500,000 . . . P r o v ~ n c ~ a l lncome taxcs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000

9,800,000 .~ -

h T ~ ~ PROFIT FOR T H E YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % 8,583,046 . ~ -

Sole:

COM PA N Y, L lM ITE D mnd subsidiary companies

Other than Provincial Paper, Limited, The G. H. Mead Company and Abitibi Service Inc.

(Slnce May 1, 1946)

For t h e Year Ended December 31, 1947

P A R T I C U L A R S

. . . . . . . . . . . . . . . . . . . . . . . . . . . Net profit for the y e a r . .

Deduct-Dividends on :

5% Preferred Shares (redeemed in 1947)

A M O U N T

$ 8,563,046

. Prior Prelerred Shares (including arrears of $e.50,000). . . . . . . . . . . . . . . . . . . . 375,000

Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' 9,092,908 - 9,467,987

BALANCE FOR THE YEAR

Add-Earned surplus as at Deccmber 31, 1946. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,146,553

Business forms and envelopes

Douglos W. Ambridge

Walter 5. Barber

Thomas Broadhurrt

Allon Groydon, K C .

Arthur P. Jewett

Arthur G. Pounsford

William H. Smith

John S. D. Tory, K.C.

Howard Young

Dou~las W. Ambrd~e , Prostdent

William H. Smith, V,ce-Prrndcnt

Walter S. Barber, Secretary-Treasurer

Royol Trust Company,

Twonto, Ont.

and

kontraal. Qua.

Royal Trust Compony,

Toronto, Ont.

and

Montreal, Que.

Price, Waterhouse 8 6. Toronto, Ont.

\I. P A P E R , L I M I T E D

The year 1947 was a noteworthy one in

the history of this Company. Total production

of the many grades of paper produced was

an all-time record. Fnrthertnore the Co~npany

began the production of machine coated paper

for the first time in the history of Canadian

papermaking. This operation is being carried

out at tlw Port ..irthur'mill and has been

outstandingly successful.

Profits for the year after all charges were

$l ,OX,3l l . The regular 4y0 dividend on the

preferred shares was pnid and a dividend for

the year of 75 cents per share on the coininon

stock of the Company was paid. The full effect

of the refinancing of the Company which was

carried out in 1946 was reflected in the year's

earnings.

The Balance Sheet discloses a moderate

increase in working capital. Inventories are

however much higher than usu;d due to the

increased scale of operations tuld to the in-

creased prices of wood iind otl~cr raw materials.

Ioa~ l for the ( ' O I I I ~ I I I ~ to carry ; I I I ~ one wlricl~ ~~~~~~~~~es serioi~sly 11-it11 the al)iliIy of

1 1 1 ~ . ( ' O I I I ~ I I I ~ lo I T ~ ) : I I I ~ its prodi~vtio~r : I I ~ s e r v ~ llle ~ O I I S L I I I I ~ ~ S o f p p e r :~de(~i i ;~ t r ly . , > I Iw l)I~ysi(~:il c o ~ ~ d i t i o ~ ~ o f S I I I I I ~ of I ~ I ~ ~ ( ' O I I I ~ ) ~ I I I ~ ' s 11dls leaves I I I I I C ~ I to I J ~ desired.

I1 s l~or~ld l w rcme~nl)tr t( l 111:lt l r o i 1 1 i 1 1 I 1 i 1 1 i t I s l r e the vickitudes of

rcc,civcrsl~ip wit11 .\l)itihi ;IMI t11:ct t h e was Yery little s p r t on i l l i l l i ~ n p r o v e n ~ e ~ ~ t s .

'I'l~c rcwll is t l ~ t a thoroug11 renovation is o~erdr ie arrd every effort is I~eing ~mitle

to I I i l l e e r r C l 11ii11tw111ce I I lu i~lstall 11cw facilities \vliere they are

.I very colnplete enginrering study of t l ~ c f r ~ l ~ l r r possi1)ilities of the various

mills lrns recently been suI)rnitted a n d is h:~vit~g the close :~t tc~l i ion o f tlre I I I ~ I I I ; I ~ ~ I I ~ C I I ~ .

'I'he Directors would like to exte~rtl their c.o~~gr:itul:itio~~s to tllc officers : I I ~

enrployees of tile Counpany on the sr~ccessfr~l year wl~ivl~ this rcporl review, and to

express their appreciation of Llre 11:rppy rclwtions \vlliclr continue to prevail.

C U R R E N T A S S E T S :

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash on hand and in bank . . $ 54,436

Accounts reccivnldc, less r c s e r r r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,543,092

Inventories of paper, pulp, wood, matrri;~l? and supplirs \.aluerl a t or below present market prices not al)i,\.c cmt, as ,lrtrrnminrd and certified by rcymnsil~le offici;~ls and cxl~cnditores on loggit~g opvrations, less reserve of$375,835 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,801,526

, $ 4,399,054

S H A R E S O F S U B S I D I A R Y C O M P A N I E S N O T C O N S O L I D A T E D :

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Simcoe Realty Company Limitpd $ 165,614 . .

Sucker Creek l ' iml~er Slidr Conrl);uly 1,imitrd. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,631 176,475

C A P I T A L A S S E T S :

Properties, plant and equipment, etc.. . . . . . . . . . . . . . . . .

Less-.\ccrued depreciation. . . . . . . . . . . . . . . . . . . . . .

O T H E R A S S E T S A N D D E F E R R E D C H A R G E S :

Rcfunilat)lc portion of excess profits t a w s (including $30,396 rcceivable in 1948)

Misccllanwus investments, less reserve. . . .

Prepaid insurancr, etc.

L I M I T E D

D E C E M B E R 31, 1947

C U R R E N T L I A B I L I T I E S :

Wages accrued and payable.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,355

Accounts payable and sundry accruals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677,682

Dominion and Provincial taxes on income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693,9%8

Other ta'xes payable and accrued

G E N E R A L R E S E R V E 699,536

C A P I T A L S T O C K :

Authorized, issued and outstancling-

4V0 Cumulative Rerlremal)le Preferencr Shares- 20,000 shares of $5P each (redeemable a t option of the conipany a t

$53.50 per share). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000

Common Shares- 350,000 shares without nominal or par value

E A R N E D S U R P L U S :

Per statement attached

P R O V I N L I M I T E D

For the Year Ended December 31, 1947

P A R T I C U L A R S A M O U N T

. . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Sales-After deducting outward freight, etc.. $11,829,261

Lens-Operating costs including administration, selling and general expenses but . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . before provision for deprecialion, etc.. 9,382,230

$ 2,447,031

Deduct- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P r o v ~ s ~ o n for deprec~atlon. .; $ 188,520 Employees' retirement income plan

PROFITS before provision for taxes on income. . . . . . . . . . . . . . . . . . . . $ 2,040,511

Deduct-Provision for: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dominion income and excess ~ r o f i t s taxes.. $ 842,000

Provincial income taxes

STATEMENT OF E A R N E D S U R P L U S For lh. Year Ended De~ember 31, 1947

Net profit for the year, as above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,055,511

Deduct-Dividends on : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preference Shares $ 40,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Common Shares.. 262,500

300-,500 -

BALANCE FOR THE YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 753,011

Add- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earned surplus as a t December 31, 1946. . $ 1,352,996

Cash value of life insurance policy surrendered during year. . . . . . . . . . . . . . . . . 33,070 Dividends from subsidiary companies (paid out of earnings of prior yrars) . . 19,637

1,405,653

EARNED SURPLUS AS AT DECEMBER 31, 1947. . . . . . . . . . . . . . . . . . . . . $ %,158,644 -

PAPER MILLS, PULP MILLS EVELOPED WATER POWERS bPmr a-1 I ;$ , f

'PINE FALLS Uanlbb. P a p Cqon7 L n 3.d

KAKABEKA FALLS A ..m..,.,,,... OW., c..l .....

\ PRODUCTS OF rROVINCIAL PAPER. LIMITED